Missteps To Avoid With Your First Hard Money Investment
Congratulations, hard money lenders! You have just invested in your flipping home and now on your way to plan on flipping construction. But stay cautious as a lot of work needs to be done. One missing step, a huge loss you may suffer from.
Hanging on for too long
Keep it in mind that as professional investors, flipping a home is way better a short-process than a long journey.
Still can’t decide between a smaller profit in a shorter period of time or a a marginally bigger profit over a longer period? Always the latter! Why? Very simple answer: you can’t put your eggs all in one basket. If you have two more baskets, you can make more money on other hard money investments.
We totally understand that maybe you are a perfectionist who wants to renovate your own flipping directly as your dreaming home, or maybe you are an innovative designer who is eager to share your latest flipping home landscape in your flipping house designs.
However time is priceless in a flipping home deal. The quicker you can flip your home and sell it, the better. Remember you are a not a DESIGNER, whereas a INVESTOR.
No emergency fund
An easy-to-forget but PRACTICAL tip: rest yourself with plenty of cash on hand in case of emergencies. A downpour of paint right before the date you are going to sell your hom OR asbestos found by the contractors to be eradicated with a full compensation fee you need to pay….Things do happen sometimes! Prepare to the fullest, expect the least. Without any emergency fund set aside, you are similar to a patient without a full insurance. Once a serious disease occurs to you, you can’t withstand on your own.
Price yourself out of the market
The trick that pricing your home for a higher sale price and then lowering it down when negotiating with your potential buyers doesn’t work any longer. Overpricing can cause that your flipping home is listed on a competitive market for so long. That’s why it’s important to refer to the comps in your neighborhood and make sure that you are on the right track of setting the price by talking with local real estate agents.